A fintech tackling one of the toughest pain points of going on holidays – having to book so far in advance for cheaper fares, and finding the money at the time to do it – has raised one of 2024’s biggest Seed rounds, taking on its first external capital after six years of bootstrapping.
The $7.5 million Seed round for Slice was led by Peak XV Partners (formerly Sequoia India). The fintech has also secured a $10 million debt facility from Melbourne alternative asset management firm Roadnight Capital.
Slice is the brainchild of Farouk Ismail and Yannick Darmalingam, who met when they both worked in CBA’s collections and hardship department.
“Between us, we had spoken to over 10,000 customers who were struggling to make their credit card repayments,” Ismail said.
”Many customers we spoke to were using credit cards to pay for overseas trips. A large number of these customers were migrants with young families, who were travelling back home for weddings, births, or big family reunions around Christmas. We didn’t want these customers to miss out on core memories, but we didn’t want them to take on unsustainable debt.
The result was PayLater Travel. Ironically, they initially used their own credit cards to pay for the flights. It was all going swimmingly until Covid hit and the travel vanished overnight, along with 95% of their revenue.
Then with just three months of runway left, looking at Flight Radar 24 and the empty skies over Australia, they had a revelation: plenty of planes were still crossing the US, so they decided to launch there.
To finance the move, Ismail sold my car and Darmalingam refinanced his home. Within a month they were live in the States. Within three months, their revenue had returned to pre-Covid levels. Then revenue jumped by 350% in 2023.
Now Slice has helped more than 70,000 customers pay for flights over its six-year history.
The fresh capital will be used to expand in the US and improve the product, and scale Slice Pay, their B2B solution for travel agents to offer the PayLater payments option to customers.
The fintech makes its money from airline commissions alongside a markup of bookings, as well as commissions from Slice Pay.
Yannick Darmalingam, Slice’s COO and CRO, said that while it’s sometimes born of necessity, travel is aspirational – a dream that kept people going through hard moments.
“When I was working at Commbank, I realised that my dream to travel wasn’t rare – hundreds of customers told me they were saving for a holiday,” he said.
“I realised banks didn’t have a good product to help people access travel in a financially sustainable way.”
While the last decade saw a plethora of buy-now-pay-later for a range of concumer products emerge, Darmalingam says PayLater Travel is not a BNPL.
”We’re not a credit product. We’re a smart savings product – if anything, we most resemble traditional lay-by – you don’t get the product until you’ve paid off the whole amount,” he said.
“If you don’t make your instalment payments, you won’t receive your boarding pass”.
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